Monday, July 20, 2009

Taxes, Trade and Healthcare: Europe vs. USA

1. WALL STREET JOURNAL -- On present trends, most of Europe will soon have lower income tax rates than most of America. And now the European Union is stealing another competitive march on Washington, this time on a free trade deal with the world's 13th largest economy, fast-growing South Korea. Last week Brussels and Seoul finished the outline of a new trade agreement, and the two sides will now write up the technical language to codify it. As for the pending U.S.-Korea trade agreement, Congress has done . . . nothing.2. AMERICAN THINKER -- Ironically, as we're moving toward having our government completely control health care, countries with government-run health care are moving in the opposite direction. Almost every European country has introduced market reforms to reduce health costs and increase the availability and quality of care. The United Kingdom has proposed a pilot program giving patients money to purchase health care. Why is this being done? According to Alan Johnson, Secretary for Health, personal health budgets "will give more power to patients and drive up the quality of care" (The Guardian, 1/17/09). It's a lesson we all should learn before considering how to improve our health care system.

We should be glad that the EU has crafted an agreement with S. Korea before the U.S. Trade Representative can now generally follow what the Europeans have negociated that won't be the typical inept agreement for the U.S. What the U.S. will lack are trade enforcment teams on the grounds in locales to defend U.S. exporters and defeat non-tariff barriers. This is what the EU has done recently in strategic places all over the world.

The U.S. is currently doing battle over pork exports to China. This war will probably result will result in a few hundred "jobs for tommorrow" be saved and enormous energy being wasted by the USTR (of course I am being sarcastic but the USTR is a pitiful agent for the growth the U.S. economy)

We should be glad that the EU has crafted an agreement with S. Korea before the U.S. The U.S. Trade Representative can now generally follow what the Europeans have negociated that won't be the typical inept trade agreement for the U.S.

Sorry for the poor sentence structure which was even worse then my usual.

"The U.S. Trade Representative can now generally follow what the Europeans have negociated that won't be the typical inept trade agreement for the U.S."

Suggestion: break the text into 2 sentences rather than creating a run-on sentence with non-parallel structure.

The U.S. Trade rep can now follow the model of the European-South Korea agreement. This approach allows the U.S. to benefit from European trade expertise and may produce a better final agreement.

While this may be true (it makes sense that contentious issues will have been settled and may serve as a base for further concessions by both parties), what evidence is there to support the assertion that the U.S. trade negotiating team is inept?

QT, one example would be the 20 movies that is all China will allow to be imported. They expect to have no barriers to our import of their goods, and yet set onerous limits to their import of our goods.

In my mind, this lack of reciprocity is partially indicative of USTR incompetence.

QT, thanks for the suggestion on sentence structure, but I think you get the point. The U.S. has a trade inbalance with China that is one-third of its entire trade deficit. The acession of China into the WTO was granted in part by the U.S. There are no provisions for currency manipulation (IMF), patent recognition, exempting VAT payments on exports from the U.S., varying local certifications and inspections, tax rebates to Chinese exporters and many more.

The U.S. Trade Representative is pretty much a public relations position to promote international trade. The office is funded to handle a few WTO cases a year that are chosen by the administration that seem to be political in nature (pork producers) and not for great gains in overall exports. The USTR is under the Treasury Secretary who made an about face on currency manipulation and lost face with the Chinese. The growing barriers to imports into China are growing and are boasted about lately in the Chinese press.

South Korea is a tremendous ally of the U.S. but even they work as hard as they can to get the best deal for their people(jobs) and their companies. The U.S. Trade Representative's office is neither staffed enough or willful enough to put together mutually beneficial agreements; and then enforce their provisions

Doesn't the U.S. possess technological, economic, and market power that dwarfs its potential trading partners? Wouldn't access to the U.S. market constitute a strategic negotiating advantage? It is difficult to imagine that a country which can inflict substantial economic pain but blocking access to the U.S. market does not use this leverage in negotiation.

All parties in a negotiation seek their own advantage. See Getting to Yes by the Harvard Negotiating Project. That S. Korea or China does so is neither unique nor unexpected.

Above are examples of U.S. policies which amply demonstrate a very hard-nosed approach geared to getting the best deal for the U.S. If you wish to assert that the U.S. trade representatives are inept routinely giving away the store, at least provide some credible evidence to support your conclusions. Otherwise, your position can easily be dismissed as anti-chinese bashing or empty protectionist rhetoric.

There is nothign wrong with our health care sytem that firing the insurance comapnies won't fix.

Where is the "insurance" in a plan that allows an employee and his employer(s) to pay health insurance premiums for 30 years and then still have no helath insurance THE FIRST TIME HE GETS SICK, just because he is sick enough to lose his job?

Where is the "insurance" in a plan that allows the health insurace company to RETROACTIVELY cancel your insurance for up to two years, for no reason. This is the case in Virginia, and the insurance company doesn't even have to tell you why they have cancelled.

Let's not confuse health care reform with health insurance reform: our present system of insurance is broken, and it is costing us billions.

We need to divorce health insurance from employment and make sure that at least basic catastrophic health insurance is is available to everyone at reasonable cost: no cherrypicking allowed. In exchange for no cherrypicking we should require tht everyone carry the minimum policy which we require insurors to offer. Insurors can offer alternative plans at higher cost, if they think they can sell them, but the benefits should be clear and available without precondition.

No more refusing to insure someones heart or feet just because they have a thyroid condition. No more advertising insurance policies that no one but the healthiest persons can actually buy.

Oh yeah, and before you go knocking real socialist health care systems, like Canada and UK, or before you listen to those that offer scaremonger stories about the horrors of health care "rationing", go talk to some actual Canadians and Brits. Sure, they will tell you, there is always someone who likes to complain, but overall the system works pretty well. Just look at the health care outcomes, vs the money they spend to see what can be done.

Are there problems, sure. But surely we Americans can devise a better system that adresses these problems. We ought to be able to devise a medical system that provides the freedom of our financial markets, while offering enough oversight to prevent the Enron's and Bernie Madoffs from robbing us blind.